Child porn charges causes dismissal of BE writer

December 8, 2018

MMA web site Bloody Elbow issued a statement on Friday regarding Iain Kidd.  In July, Kidd along with a business partner were charged with having child pornography in their possession.

The contents of the statement from John Ness is below:

On Friday, Bloody Elbow became aware of news reports linking one of our writers to criminal activities including possession of child pornography. As a result, Bloody Elbow and SB Nation terminated his contract that same day.

SB Nation and Bloody Elbow strongly condemn the types of activities reported and encourage our readers and listeners to visit Protect Children in Canada, Stop It Now in Scotland, and Darkness 2 Light in the United States for more information to support victims.

In July, the 30-year old Kidd was charged with having downloaded child pornography as well as humans having sex with animals.

Kidd did not receive any jail time despite having in his possession 984 still images and 496 videos of child pornography and 7,689 pictures of extreme pornography after a search warrant seized his computers and were able to decipher the contents.

Via MMA Junkie:

Kidd, a resident of Glasgow, Scotland, is also required to register as a sex offender, obey a curfew from 7 p.m. to 7 a.m., and is restricted from using the internet browser Firefox; he must also disclose his browsing history upon request.

Kidd appeared on Bloody Elbow podcasts and wrote articles focused on the UFC Anti-Doping Program and USADA.  Since this information came to light, he has deactivated his social media account on twitter.

What is most surprising here is that the investigation began in August 2017 and the news story in Scotland came out in July 2018.  Yet, no one in the MMA community knew of Kidd’s indiscretions.  This was clearly the right move by SB Nation to terminate Kidd’s contract and it is surprising (and thankful) that no one was physically hurt here.

Leslie Smith NLRB Appeal is denied

December 4, 2018

Leslie Smith’s appeal of the dismissal of her NLRB complaint has been denied.  According to the NLRB web site a denial letter was issued on November 27, 2018.

In May, Smith filed a labor complaint against Zuffa last May citing the company took adverse action against Smith due to her involvement in a protected activity.  As we know, Smith is an ardent supporter of Project Spearhead, a group supporting athlete’s right and the need for an association/union.  The NLRB investigator found merit in her claim and there was an indication in June that the NLRB would file a complaint against Zuffa based on the evidence provided by Smith.  But the case was sent to Washington D.C. for review by the Division of Advice.

After it was turned over to the Washington D.C. office, the NLRB reversed course and in September dismissed Smith’s claim citing that the UFC’s conduct actually benefited Smith.

In light of the dismissal, Smith’s attorney, Lucas Middelbrook, filed an appeal, requesting that the same Investigator that initially was assigned to the matter to reconsider the dismissal.  It also requested the recusal of NLRB’s General Counsel Peter Robb and Deputy General Counsel John W. Kyle.  Middlebrook asserted that Robb and Kyle were directly involved with the decision to dismiss Smith’s case.

The latest news looks as though the NLRB has reviewed the appeal and has upheld the dismissal.

Payout Perspective:

Bad timing for this news as Smith will appear on Samantha Bee’s “Fully Loaded,” talking about her quest for better fighter rights.  It airs Wednesday night.  If there is an appeal of this board decision it will go to the United States Court of Appeals.  This denial is not too surprising based on the decision this past September.  MMA Payout will have more information on this matter.

 

 

Court in UFC Antitrust Lawsuit decline legal “hot-tub”

December 2, 2018

The Court in the UFC Antitrust lawsuit has ruled that there not be an evidentiary hearing on the admissibility of expert reports and testimony prior to the December 14th Motion for Summary Judgment and Class Certification hearing.

The Court issued a Minute Order late last week:

The Court has considered the Request [ECF No. [617]] for an evidentiary hearing. The Court DENIES this request at this time. The Court will the hear arguments of counsel and make a determination at the hearing on December 14, 2018 whether an evidentiary hearing is necessary to decide the Motion To Certify [ECF No. [518]].

As we explained in this post, the hearing requested by Zuffa was to determine expert testimony and the admissibility of the same.  The Plaintiffs argued that Zuffa was asking for a reconsideration of a evidentiary hearing to determine the expert testimony.  As Plaintiffs point out, the Motion to Certify the Class occurs on December 14th and would require a delay in that decision if they were to entertain such a hearing.

Payout Perspective:

A minor victory for the Plaintiffs here as it does not have to prepare for another hearing in this lawsuit.  It also prevents a determination on the evidence prior to the class certification hearing.  While the Court may still request an evidentiary hearing at some point, it saw no reason to do it prior to next Friday’s big day.  One might take this as good news for Plaintiffs if you think that the Court was concerned about the information that it needed another day to decide the evidence in this case.  Of course, the court’s calendar could be so full, there was just not enough time to slot it in before the 14th.  MMA Payout will keep you posted.

Seeking to save Ali Act case, Trout files Motion for Reconsideration

November 22, 2018

Attorneys for Austin Trout have filed a Motion for Reconsideration in light of the District Court ruling which dismissed Trout’s lawsuit against the WBO and sent his case to arbitration.

In its motion, Trout argues that hat the WBO waived any right to arbitration, pointed to the promotion’s own guidelines with respect to jurisdiction and claims that the Ali Act cannot be subject to arbitration.

As you might recall if you have been following this lawsuit, Trout filed a lawsuit against the promotion as he believed he was passed over a chance to fight for the title.  The case was moved to Puerto Rico where the WBO is located and the promotion filed a motion to dismiss the case and compelling it to arbitration per the terms of the contract.  The Court determined that Trout’s promotional agreement with the WBO with its arbitration agreement ruled the day and dismissed the case to go to arbitration.

Trout is now moving for the court to reconsider the ruling.  The Court will have to be persuaded that its original ruling was in error.

Trout argues that by the WBO having moved the case to Puerto Rico it requested the case to be litigated and waived its right to arbitration.  Trout also claims that the parties have engaged in discovery which would be considered litigating the case.  Moreover, they state that Trout’s claims under the Ali Act cannot be determined by arbitration.

In opposing the motion to reconsideration, the WBO notes that there is no error of law which Trout points to that was decided in error.  This may be the strongest argument for denial by the WBO here.  The WBO claims that the motion is merely an attempt to relitigate the points the Court has already decided. In its opposing brief, the WBO claims it did not waive its right to arbitration. WBO states that despite discovery taking place, it did not substantially involve itself in litigation.  It also suggests that even though the contract indicates a jurisdiction and venue for possible litigation it does not “override” the arbitration clause.

The WBO noted that the Ali Act was subject to arbitration.  Although this issue has not been decided, it argues that the “scope of issues subject to arbitration is determined by the agreement itself.”

Motion for Reconsideration by on Scribd

Opposition to Motion by on Scribd

Reply by on Scribd


Payout Perspective:

As we’ve discussed when the Court ruled that this case go to Arbitration, this decision has big implications for those seeking to litigate under the Ali Act.  The WBO claims, citing case law, that any issue in the contract is subject to arbitration.  However, there has not been a legal challenge where a boxer has sued under the Ali Act and it has gone to arbitration.  The WBO makes a compelling case that there has not been an error of law for the Court to overturn its original decision.  An appeal may be necessary if Trout wants to overturn this decision.  MMA Payout will keep you updated.

Plaintiffs in UFC Antitrust Lawsuit try to avoid “hot tubbing”

November 16, 2018

Plaintiffs in the UFC Antitrust lawsuit have filed a letter to the Court arguing that there should not be an evidentiary hearing on expert testimony.  The legal slang of “hot tubbing” where “concurrent expert evidence” is being offered and heard by the court at the same time.

Letter November 16 by on Scribd

Plaintiffs see a request by Zuffa to hold an evidentiary hearing regarding the expert testimony as an end-around to exclude expert testimony.  The Court denied Zuffa’s Daubert motions without prejudice in late September per Plaintiffs. It’s the position of Plaintiffs that this is a way to ask for the Court to reconsider at this late date.  Plaintiffs also argues that the format of each side presenting its experts on direct and then cross examines the other side would take multiple days.  Notably, this would run into the rescheduled date for the Motion for Summary Judgment of Friday, December 14, 2018.  It would most certainly delay the hearing date once again if the Court were to entertain the hearings.

There is also the argument that evidentiary hearings on class certification are not required.  Plaintiffs cite cases where the Court suggests that evidentiary hearings for these types of complex cases are unnecessary.  Finally, Plaintiffs also argue that evidentiary hearings for summary judgment almost never happen and there’s no extraordinary reason brought up by Zuffa why one should take place now.

Notably, “hot tubbing” is not prohibited, but its not specifically addressed.  There are various opinions on its use and affect.  Judges have wide latitude when it comes to admitting expert witness testimony.  Of the factors a court may consider, the most important tends to be whether or not the testimony is a waste of the court’s time.

Payout Perspective:

And we are now introduced to the term of “hot tubbing” which is a term that originates from Australia according to some research.  It’s the “battle of the experts” and the purpose seems to be a way to flesh out some of the theories asserted by the parties in hopes of scaling down the arguments for the court at trial.  Plaintiffs believe that Zuffa is asking for this type of hearing as either a second bite at attempting to exclude their experts or stall.  I would think that it’s the former rather than the latter.  Zuffa likely believes that if they can knock out some of Plaintiffs experts, there will be little left of Plaintiffs claims.  MMA Payout will keep you posted.

ShowMoney talks UFC Antitrust Lawsuit and ONE business

November 14, 2018

Show Money is back once again as I discuss the business of MMA with Bloody Elbow’s John Nash and Paul Gift (also of Forbes).

This show’s topics includes the upcoming Motion for Summary Judgment in the UFC Antitrust Lawsuit and the business moves made by ONE Championship.

Zuffa Reply Brief in support of dismissing antitrust lawsuit takes aim at Plaintiffs’ claims

November 5, 2018

On Friday, Zuffa filed its Reply in Support of its Motion for Summary Judgment in dismissing all claims against it by former fighters in the antitrust lawsuit.

In its Reply Brief, it argues that Plaintiffs have now changed its theory of liability since its original claims are no longer viable.  Zuffa argues that Plaintiffs have failed to define relevant markets and in turn have not proven its monopsony and monopoly claims.

In a more of a procedural argument, Zuffa argues that Plaintiffs failure to rebut certain Statement of Undisputed Facts in its Motion and are therefore admitted as true.  Alternatively, Zuffa states Plaintiffs have failed to raise any genuine factual disputes in its counterstatement of facts.

Zuffa argues that Plaintiffs’ Opposition to its Motion for Summary Judgment relies heavily on Dana White’s puffery.  But, as Zuffa argues, “strong statements praising your own business and demeaning your competitors are evidence of competition, not an antitrust case.”

This past September, Plaintiffs filed its Opposition Brief to Zuffa’s Motion for Summary Judgment.  The main argument by Plaintiffs is that the UFC is the “major league” of MMA and it has done so through anticompetitive behavior.  Plaintiffs claim that Zuffa used its market leverage to extend exclusivity over its fighters through coercion, intimidation and other means of forcible persuasion.  The claim is that the evidence supplied shows Zuffa abused its market power.

Zuffa claims that Plaintiffs have provided a new category for fighters: “marquee,” citing marquee fighters as the most important input for MMA promoters and that Zuffa violated the antitrust laws by preventing competitors from having a “critical mass” of the fighters.  Zuffa argues that this theory of the need to have a “critical mass” of “marquee” fighter does not appear in its Amended Complaint nor is there discussion of this theory in its discovery responses.  Moreover, Zuffa argues that Plaintiffs fail to define this term.

Moreover, Zuffa states that the relevant markets in which Plaintiffs allege Zuffa has power over have not been properly identified.  Zuffa notes that Plaintiffs failed to provide an evaluation of the “marquee” query and that their expert, Dr. Hal Singer, does not include the Significant Non-transitory Decrease in Price test.  Zuffa also takes issue with the lack of defining an output market for a monopoly claim.  This is due in part to its assertion that Dr. Singer failed to properly conduct a SSNIP test.  Zuffa cites to Singer’s admission that he did not test whether cable networks, broadcast networks and sponsors (the output market according to Dr. Singer) would switch to sports entertainment.

Zuffa also states that Plaintiffs cannot dispute that other promotions are viable competitors of the UFC.  They cannot dispute the testimony of the promoters which claim that the UFC has not been an obstacle to them signing fighters.  In this argument, they negate the testimony of Kurt Otto and Jeremy Lappen because they promoted MMA events before the class period and before Plaintiffs claim Zuffa had monopsony power which deems their testimony irrelevant for purposes of this lawsuit.

One of the other claims asserted by Zuffa in its Reply is that the Plaintiffs cannot show relevant direct evidence of lower compensation as a result of the claimed monopsony power.  Zuffa argues that Plaintiff cannot solely rely on their expert’s reports alleging the correlation.  Here, Zuffa argues that the practical market facts do not show that the company suppressed compensation due to its share of the market.  Zuffa also argues that Plaintiffs’ are making a “predatory hiring” claim as Plaintiffs describe a marketplace where the UFC retains fighters it does not need in order to keep them away from other promotions.  But, Zuffa argues it simply offered fighters more money.  This would seemingly fly in the face of Plaintiffs claim that wages were suppressed.

Furthermore, Zuffa states that Plaintiffs have failed to show its foreclosure theory based on the UFC’s use of exclusive contracts.  Basically, despite the inference, Plaintiffs cannot show intent that the contracts foreclosed competition.

These are the main arguments asserted in Zuffa’s Reply Brief which rebuts Plaintiffs’ Opposition and supports the promotion’s contention that the Plaintiffs’ lawsuit contains no general issues of material facts and as a result must be dismissed.  The strongest arguments in my opinion seem to be the argument that other promotions do not appear to be harmed by Zuffa’s business practices.  Plaintiffs point out how the purported scheme may still impact other MMA competitors.

It is clear that Plaintiffs do not respond to Zuffa’s Statement of Undisputed Facts (“SUF”) in its Opposition.  Rather, they introduce their Counterstatement.  Procedurally Plaintiffs should have responded to Zuffa’s SUF.  If you do not, the statements are admitted as true.  Plaintiffs will likely argue that their Counterstatements are equivalent to a denial or rebuttal.  It would be up to the Court to determine this.  I would think that Plaintiffs would have been extra cautious with this filing and would have ensured that they would not deem anything admitted if they did not respond.  Notwithstanding this argument, the Court will need to decide this Motion.

Both sides have made strong arguments for why this case should go forward or be dismissed.  The question is whether there are material facts still to be decided with the lawsuit as it is currently framed for it to go forward to trial.  Zuffa makes strong arguments stating why it should be dismissed and premise Plaintiffs theories based on unverified assertions and a moving target of theories.  Plaintiffs maintain its basic argument that Zuffa’s market power dictated the rest of the industry and through its strategies, was able to suppress fighter rights and wages.

MMA Payout will keep you posted.

Reply Brief by on Scribd

Zuffa files Reply Brief supporting its right to seal docs in Antitrust case

October 29, 2018

In its latest filing, Zuffa has filed its reply in support of its motion to seal parts of the opposition brief filed by the plaintiffs in response to the company’s motion for summary judgment in the Antitrust lawsuit.

Zuffa filed a Motion to Seal certain documents that are being used in support of its Motion for Summary Judgment.  The promotion included justifications for sealing each of the documents it requests.

Zuffa Motion to Seal by on Scribd

Plaintiffs argue that the documents are not commercially sensitive information.  In its brief, Plaintiffs cite testimony from Zuffa’s attorney Michael Mersch about a hypothetical contract, testimony related to Lorenzo Fertitta’s deposition concerning financial information and wage share.  Plaintiffs argue that there is no confidential information contained in the testimony sought to be sealed. Zuffa also requests portions of expert reports to be redacted.  This includes plaintiffs’ expert report from Hal Singer and its own expert Robert Topel.

Plaintiffs Opposition by on Scribd

Perhaps one of the more salient arguments in Plaintiffs argument is that many of the passages that Zuffa seeks to redact are old.  Essentially, the information that Zuffa seeks to seal are remnants of the past and do not contain trade secrets because they no longer contain information that is subject to the current business landscape.

The Reply is its response to the Plaintiffs’ seeking to unseal certain documents filed in support of the brief filed by the fighters suing Zuffa. Plaintiffs’ opposed the motion for summary judgment filed by Zuffa seeking to dismiss the fighters’ claims against the promotion.  But, although Zuffa has unsealed and unredacted certain documents, there still remains a giant portion still unavailable for viewing.

Zuffa Reply ISO Motion to Seal by on Scribd

In its Reply Brief it reaffirms that it properly identified documents that it was sealing and met the legal burden for documents needed to preclude.

Additionally, they claim that the documents sought to seal are specific and would pose competitive harm to the company as they would divulge confidential business information and strategy.  Zuffa also rejects Plaintiffs argument that the information sought to seal is old and already public knowledge.

The Court will decide whether Zuffa carries its burden to show that the records it seeks to seal “articulate compelling reasons supported by specific factual findings,” providing ‘articulable facts’ that favor secrecy and that those interests outweigh the presumption of public access to judicial records.

While it has been underscored in this briefing, the right of access by the media is a viable argument for the Court to look at the sealing of documents critically.  The Reply includes several tweets from John Nash and articles for Paul Gift which discuss the Zuffa antitrust lawsuit.  Certainly, the attorneys have taken just a survey of the reporting going on here as media here is just an afterthought from both legal sides.

The recent reversal in ruling in the Hunt-Zuffa lawsuit which sealed Bout Agreements.  In the Order which granted the sealing of documents, the Court stated, “[D]efendants claim that the agreements contain proprietary information, and that competitive standing with MMA promoters.  The court finds that defendants have identified compelling reasons that warrant sealing the exhibits…”  This does not seem compelling at all.

How will this all shake out?  If you take the Hunt ruling into consideration, it would seem that despite the “compelling” standard for sealing documents, the Courts skew toward finding any excuse to seal a document.

Deontay Wilder files appeal brief in Povetkin Meldonium case

October 22, 2018

Deontay Wilder filed its appeal brief in requesting that the court overturn the trial court’s ruling in favor of World of Boxing and Alexander Povetkin.  The appeal highlights an incongruent ruling by the court which appeared to defer to the World Boxing Council in its determination of Povetkin’s drug test failure.

The match between the two heavyweights was set by the World Boxing Council to take place in May 2016 in Moscow, Russia.  Wilder was training in England when he learned that Povetkin and tested positive for a banned substance.  Wilder decided to return to the United States instead of going to Russia believing that the fight was cancelled due to the failed drug test.  Povetkin and his promotion, World of Boxing claims that Wilder breached the contract when he failed to go to Russia for the match which prompted the WBC to cancel the fight.

In limbo is a purse of $7.15 million still in escrow.  The trial court granted World of Boxing’s request for the escrow money to be return.  Of course, Wilder believed that he should be granted his share of the money since Povetkin failed the drug test.  A lawsuit filed by the heavyweight champion ensued in which WOB and Povetkin filed counterclaims against Wilder.

From our post this past April:

In February 2017, a jury just took 32 minutes to determine that Povetkin took the banned substance Meldonium post-January 1, 2016, however that did not mean much in the outcome of this Summary Judgment motion.

One of the overarching issues in the lawsuit as to who is to blame for the failed fight in Russian in May 2016.  You might infer from the news of a failed drug test from Povetkin that it was the Russian.  However, Povetkin claimed that Wilder’s failure to appear in Russia forced the hand of the regulating body, the WBC, to call off the fight.

The WBC Bout Agreement takes precedent here as the Court examines the contract in applying basic contract principles.  But in its application, there seem to be things that don’t make sense.

“We begin by noting that the Bout Agreement contains no language mandating that each fighter refrain from ingesting banned substances.”

The inference one might yield from this sentence of the Court opinion is that tis ok to used banned substances.  Based on this, the Court held that Povetkin did not breach the Bout Agreement because it cannot conclude when/if he ingested the banned substance Meldonium. Obviously, this is opposite the jury finding.

The good news for Wilder is that there was no finding of a breach of the Bout Agreement when Wilder did not go to Russia for the fight with Povetkin.  The Court notes, “[t]here is simply no evidence that the WBC’s postponement decision was a “normal or foreseeable consequence” of Wilder’s actions, or that Wilder’s acts otherwise caused the WBC’s decision.”  Povetkin and World of Boxing sought $2.5 million in liquidated damages that was part of the Escrow Agreement.  “While the WOB Parties argue that it was Wilder’s failure to appear in Moscow, rather than Povetkin’s positive test result, that caused the WBC to postpone the Bout…no reasonable jury could indulge in the speculation that would be required to conclude that this was so,” stated the Court opinion.  It went on to state, “[B]ecause a reasonable jury could not find that any breach by the Wilder Parties proximately caused the WOB Parties’ damages, the Wilder Parties’ motion for summary judgment dismissing the WOB Parties’ claim for breach of the Bout Agreement is granted.”

As for the escrow funds, World of Boxing is entitled to its release held in escrow but no interest because no judgment was entered against Wilder.

The claims for defamation filed by Povetkin remain although they may be dismissed pending further movement in this case.

The Court opinion seems to fly in the face of the original jury finding that Povetkin took Meldonium post-January 2016.  The opinion seems to lean entirely on the WBC Agreement for its determination on its procedure in determining the status of Povetkin based upon his drug tests.  The Court quotes WBC Rules and Regulations when it notes, “the WBC may in its discretion consider all factors in making a determination regarding responsibility, relative fault, and penalties, if any.”

The WBC did not issue a ruling on Povetkin’s positive drug test until August 17, 2016.  It noted that it called the bout off and reserved any further ruling.  It then determined that it was not “possible to ascertain that Mr. Povetkin ingested Meldonium after January 1, 2016.  After two additional rulings by the WBC which opposed the August 17, 2016 ruling, it overturned the decision and stuck with its August ruling.  It based this on a study showing Meldonium having the ability to stay in one’s system for more than five months.  It also noted Povetkin had negative drug tests six other times.

The WBC seemed to be dragging its feet in this case as it put off the ruling on Povetkin despite the litigation moving ahead.  There’s also the issue of Povetkin’s positive test for ostarine which happened after the lawsuit began.  Yet, the WBC did not penalize him for this and even stressed negative drug tests notwithstanding the two positive tests for Meldonium and ostarine.

The appeal brief, which was filed in August 31, 2018, brought up the glaring disparity in issues regarding the WBC ruling and that of the jury trial.

Wilder notes that the WBC confirmed in its August 2016 ruling that the bout was called off due to Povetkin’s positive test.  In December 2016, Povetkin tested positive for another banned substance.  It issued a March 2017 ruling which doled out an indefinite suspension and a $250,000 fine.  But, in November 2017, it issued another ruling which amended the indefinite suspension to a fixed one-year fine and reaffirmed its ruling that it could not be found whether Povetkin ingested meldonium post-January 1, 2017.

Wilder points out that WOB’s attorney argued to the Court that “only the WBC, and not a jury, was competent to decide the issue, and that a jury verdict would merely be an advisory opinion.” Despite the trial judge’s disagreement, WOB attorney believed that the contractual agreement of the WBC would be the controlling factor in determining whether Povetkin took Meldonium.

However, Wilder believes that the District Court’s interpretation of the Bout Agreement was wrong.  Wilder argues that the “WBC does not have the discretion to resolve private disputes between parties to a contract.”  The Bout Agreement includes a clause which states that the parties “irrevocably accept and consent to the jurisdiction of” the District Court to “resolve any disputes arising out of” the Bout Agreement.” Wilder claims that whether or not Povetkin ingested Meldonium constituting a breach of the Bout Agreement is clearly a dispute arising out of the agreement, over which the District Court has exclusive jurisdiction.  Essentially, while the Bout Agreement gives discretion to the WBC, it does not supersede the authority of the courts to interpret the contract.  And Wilder argues, “[b]y cedeing the decision regarding whether Povetkin breached the Bout Agreement to the WBC,” it committed reversible error.  Additionally, the counterclaims filed by WOB and Povetkin reflect the authority of the courts over the WBC Bout Agreement.

Wilder also argued that even if the appellate court holds that the trial court was correct in holding that the WBC and not the trial court could determine whether the Bout Agreement was breached, it caused error in its application of the facts of the case.

Wilder cites the following press release from the WBC:

They also argue that the date of the bout is a material term in the contract.  Thus, whether or not the date of the bout was postponed is not relevant.  WOB asserts that Wilder breached the agreement due to his failure to fly to Russia for the intended fight.  Wilder cites several cases in which the exact date of the events is deemed essential to the terms of the contracts.

Following along the line of logic that the WBC had some authority in its contract, Wilder argues that the WBC delegated its duty to the trial court:

As a result, Wilder argues that the WBC applied a “strict liability” standard wherein if a jury found that Povetkin ingested Meldonium after January 1, 2017, he would be stripped of his mandatory challenger status which meant that his fight with Wilder would be off the table.

Wilder also indicates something amiss with what may be infers as a “quid pro quo” with Povetkin and the WBC. Pointing out the press release by the WBC, it seems as though if Povetkin paid his fine, he would be reinstated.

In a footnote of its brief, Wilder states that the trial court denied a request to reopen discovery on this limited issue but Wilder request this court again.

Finally, Wilder argues that he is entitled to the escrow property in the amount of $4,369,365 as a result of WOB’s breach of the Bout Agreement.

Payout Perspective:

This is a fascinating legal case premised on the basic tenets of a contract. The trial court’s decision to side with Povetkin and WOB in determining that the WBC would be the only entity capable of deciding whether Povetkin ingested Meldonium seems out of line with the job of the court to interpret the contract when a dispute comes before it. We have seen with the Austin Trout case that the Court has deferred to the drafter of the private contract despite the aggrieved party bringing a lawsuit. MMA Payout will continue to follow once WOB files its appellate brief.

Boxer Austin Trout case moved to arbitration, casts concern on future of Ali Act

October 16, 2018

A Federal Court in Puerto Rico has dismissed boxer Austin Trout’s lawsuit against the World Boxing Organization for claims of violating the Muhammad Ali Boxing Reform Act.  The court determined that due to the signed contact, Trout must submit to arbitration.

Austin Trout Case Order on … by on Scribd

Trout claimed that the WBO had dropped him from the promotion’s ranking arbitrarily which affected his ability to receive a title shot.

The lawsuit landed in Federal Court in Puerto Rico after the boxing promotion moved the case to Puerto Rico where its offices are located.  Originally Trout filed the lawsuit in state court in New Mexico.  The WBO moved the case to Federal Court in New Mexico and then requested the venue change to Puerto Rico which the Court granted.

The WBO claimed that Trout was bound by the terms of his WBO contract which required that he arbitrate any disputes he had with the contract.  According to the contract, the WBO would handle the arbitration and any appeal would be heard by a grievance committee put together by the promotion.

Trout argued that the lawsuit should remain in court for two reasons.  First, Trout’s attorneys argued that the WBO waived its right to arbitration as it already appeared in the case and filed procedural motions for the case to be moved to federal court and then to Puerto Rico.  Secondly, Trout argued that his claims were based upon violations of the Ali Act which should be litigated instead of arbitrated.  Furthermore, it argued that the arbitration clause was invalid because the WBO would effectively “be both a party and a judge.”

The WBO moved to compel arbitration and dismiss the lawsuit.  In siding with the WBO, the Court indicated that the WBO’s contract which included the arbitration clause was valid and related to the dispute alleged by Trout and therefore it was a valid arbitration clause.  Trout unsuccessfully argued that there was ambiguity in the contract and with contracts of adhesion, they should be found in favor of the non-drafting party.  Here, Trout argued that the arbitration clause related to disputes with third parties whereas disputes directly with the promotion could be litigated.  Part of this argument was due to the WBO serving as the arbitrator in the matter.  However, the court found no ambiguity and that the contract availed the parties to arbitration on all matters.

As to the argument that the lawsuit was litigated by the WBO and as a result, it had waived its right to arbitration, the court argued that the sole responses made by the promotion in court were procedural and not substantive.  Hence, it had not participated in litigation of the case and did not waive its right to an arbitration.

There is no indication that Trout will appeal this decision at this point.

Payout Perspective:

The underlying issue in this decision is that claims under the Muhammad Ali Act could be arbitrated based on a contract signed by the parties.  This does not bode well for the possibility of the Ali Act Expansion to combat sports.  The reason being is that if the party drafting the contract (e.g., Zuffa) includes a provision that all disputes under the contract shall be resolved via arbitration, it might mute the effectiveness of the Ali Act.  While arbitration is a faster way to resolve disputes, in the Trout case, he was concerned with the ability for the WBO to be judge and a party.  One might foresee an MMA promotion including in its contract its ability to choose an arbitrator.  We have already seen that the UFC Anti-Doping Policy has chosen its own vendor and arbitrator.  It would likely do the same for any case claiming a violation of the Ali Act.  Unless there is an appeal, look for this decision to rear its head in the future.

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